Egypt Food and Drink Report Q4 2012

We highlight that despite the gloomy outlook for the economy, the core dynamics that have attracted many companies to Egypt in the first place have not changed. It has an enormous population that could surpass 100mn by the early 2020s, according to UN data, and this population base is young and expected to have increasing spending power. Egypt is also arguably the cultural hub of the Arab world and can double up as an excellent gateway to the wider North African and Sub-Saharan African regions. No other country in the Arab world can come close to matching Egypt’s potential, in our view, which is why many of the world’s largest consumer companies will very likely be increasing rather than cutting back their spending.

Headline Industry Data (local currency) ?? 2012 per capita food consumption = +10.7%; forecast compound annual growth rate (CAGR) to 2016 = +11.8% ?? 2012 mass grocery retail sales = +15.3%; forecast compound annual growth rate to 2016 = +15.9%

Key Company Trends Egypt Aims to Increase Sugar Production: In February 2012, local sugar refinery Nile Sugar reported plans to expand its capacity by 40% over the coming year, as part of its programme to meet rising demand. Currently, the company’s crushing and refining capacity is in the region of 7,000 and 1,200 tonnes of beet sugar per day respectively. In 2011, Nile Sugar reportedly operated at more than full capacity, with its output topping 305,000 tonnes, all of which was destined for the local market. Nile Sugar also imports raw sugar to meet the demand. According to official figures, Egypt still imports around 1mn tonnes of sugar per annum, which meets one-third of domestic demand. Turkish Discounter BIM Birlesik Magazalar (BIM) Eyeing Egypt: In March 2012, BIM – which currently operates in Morocco – revealed plans to enter Arab Spring markets. The discounter is expecting to establish 10 stores in Egypt in 2013, which will offer both private labels and foreign brands. By 2014, the retailer’s total investment in Egypt is expected to top TRY25mn.

Key Risks to Outlook External Risks: Although we expect economic activity to gradually gather steam over the coming quarters, we believe the conditions necessary for a more aggressive acceleration are not yet present, with fiscal and current accounts under strain as a result of the downturn. Moreover, the external climate is also likely to prove less than favourable in the near term, with the eurozone (which absorbs one quarter of Egyptian exports) having recently entered what may prove to be a protracted recession.

Table of contents

Chapter 1 - BMI Industry View

Chapter 2 - SWOT Analysis

Egypt Food Industry SWOT

Egypt Drink Industry SWOT

Egypt Mass Grocery Retail Industry SWOT

Chapter 3 - Business Environment

BMI’s Core Global Industry Views

Table: Core Views

Middle East Food & Drink Risk/Reward Ratings

Table: MENA Risk/Reward Ratings Sub-Categories, Q (scores out of )

Table: MENA Food & Drink Risk/Reward Ratings, Q

Egypt Food And Risk/Reward Rating

Macroeconomic Outlook

Table: Economic Activity, -

Chapter 4 - Industry Forecast Scenario

Consumer Outlook

Food

Food Consumption

Table: Food Consumption Indicators – Historical Data & Forecasts

Confectionery

Table: Confectionery Value/Volume Sales – Historical Data & Forecasts

Table: Chocolate Volume Sales, Production & Trade – Historical Data & Forecasts

Canned Food

Table: Canned Food Value/Volume Sales – Historical Data & Forecasts

Prepared Food

Table: Fish

Table: Frozen Fruit & Vegetables

Table: Jams & Jellies

Pasta

Table: Pasta

Oils & Fats

Table: Oils & Fats

Drink

Beer

Table: Alcohol Drinks Value/Volume Sales – Historical Data & Forecasts

Soft Drinks

Table: Soft Drinks Value/Volume Sales – Historical Data & Forecasts

Hot Drinks

Table: Hot Drinks

Trade

Table: Trade Indicators

Mass Grocery Retail

Table: Mass Grocery Retail Sales By Format, %

Table: Mass Grocery Retail Sales – Historical Data & Forecasts

Chapter 5 - Food

Key Industry Trends And Developments

Western Restaurants Prompt Casual Dining Expansion

Nestlé Increases Investment in Egypt

Foreign Interest Growing

Domestic Companies Pursuing Local Expansion

Firms Also Interested in Overseas Collaborations

Market Overview

Food Processing

Confectionery

Trade

Agriculture

Dairy Industry

Sugar Processing Industry

Halal Food

Chapter 6 - Drink

Key Industry Trends And Developments

Local Leaders Investing In Diversification And Capacity Expansion

Cutting Down Tourism Reliance In Alcohol Sales

Multinational Interest Growing

Market Overview

Alcoholic Drinks

Soft Drinks

Hot Drinks

Chapter 7 - Mass Grocery Retail

Key Industry Trends And Developments

Investment Interest Growing Slowly

Supply Chain Improvement

Carrefour MAF Continues Expanding

Makro Looks To Export Egyptian Produce

Market Overview

Leading Retailers

Chapter 8 - Competitive Landscape

Table: Key Players In Egypt’s Food Sector

Table: Key Players In Egypt’s Drink Sector

Table: Key Players in Egypt’s Mass Grocery Retail Industry

Chapter 9 - Company Monitor

Food

Cairo Poultry Company (CPC)

Faragalla

Cadbury Schweppes (BimBim)

Drink

Al-Ahram Beverages Co (ABC)/Heineken

Egypt Bottling Company (Pepsi)

Coca Cola Bottling Company of Egypt

Mass Grocery Retail

Metro (Mansour Group)

Carrefour MAF

Spinneys Group

Chapter 10 - Demographic Outlook

Table: Egypt’s Population By Age Group, - (‘)

Table: Egypt’s Population By Age Group, - (% of total)

Table: Egypt’s Key Population Ratios, -

Table: Egypt’s Rural And Urban Population, -

Chapter 11 - Risk/Reward Ratings Methodology

Weighting

Chapter 12 - BMI Food & Drink Industry Glossary

Food & Drink

Mass Grocery Retail

Chapter 13 - BMI Food & Drink Forecasting & Sourcing

How We Generate Our Industry Forecasts

Sourcing

Related research categories

By sector: General drinks

By market: Egypt (in Africa)